Latest SBA lending limits having an impact

NORTH BAY — North Bay SBA lending — both 504 and 7a — increased by 35 percent in dollars and 21 percent in volume year-over-year for the first half of fiscal 2011 that began in October.

A total of $47,822,600 was lent to North Bay businesses in those first six months, according to the SBA.

The maximum loan allowance was increased from $2 million to $5 million last year for both the 504 and 7a SBA programs last year with the Jobs Act.

“Across California we had a huge increase in lending,” said Mark Quinn, district director of the SBA in San Francisco. “In dollars it has gone up significantly. There are bigger loans being made because SBA is allowing larger loans.”

He said that while in California as a whole the increased limit made a big difference, in the North Bay it didn’t turn out to be as significant. Only one loan made was over $2 million, Sam’s Anchor Cafe in Tiburon. The loan was for just under $3 million dollars.

Small businesses in the greater Bay Area received 15 percent more in SBA-504 financing the first two quarters the fiscal year compared to the same period a year ago, according to CDC Small Business Finance.

The loans were made to 164 small businesses that currently employ or plan to employ a total of 5,656 workers.

SBA-504 loans are used to finance commercial real estate purchases and equipment.

This year, for the first time, the U.S. Small Business Administration has allowed for the temporary extension of the 504 loan program to allow refinancing of existing commercial real estate debt.

The administration approved the SBA 504 Debt Refinance Program outlined in the Small Business Jobs Act of 2010. Market research showed that a large percentage of commercial mortgages outstanding are set to mature within the next few years, particularly those held by community banks. As real estate values have declined, however, even small businesses that are performing well and making their payments on time can have difficulty refinancing these loans and may need to restructure their debt.

Under the Jobs Act, the SBA implemented the temporary program through Sept. 27, 2012, which allows small businesses to refinance eligible fixed assets in its 504 program without requirement of an expansion, as is the case with typical 504 loans. The SBA intends this program to provide small businesses the opportunity to lock in long-term, stable financing, as well as protect jobs.

“We haven’t seen as much refinancing coming through as we thought,” Mr. Quinn said. “Some of that is we had put some limits on the date of the loan that would be coming due so we wouldn’t use up all the funds. But since that wasn’t a problem we changed it so any loan can be refinanced with the 504.”

Marin County total loans were $13,106,700; Napa was $7,499,500 and Sonoma was $20,755,400 for the first two quarters of fiscal year 2011.

Exchange Bank made $5 million in loans, Redwood Credit Union $3.4 million and Circle Bank made $3.1 million in loans.